Musk Confirms $35,000 Base Tesla Model 3 Still 6 Months Away
A few weeks ago, Tesla CEO Elon Musk Tweeted about a potential timeline for the base Model 3 and now we have further confirmation.
When asked on Twitter about information pertaining to the standard battery Tesla Model 3, Musk reiterated that a target rate of production and target cost must be obtained before shipping the minimum cost trim. He noted that Tesla could “lose money & die” if it didn’t follow this process. The CEO explained that Tesla would need three to six months of 5,000-per-week production before being able to bring the $35,000 car to market.
With production, 1st you need achieve target rate & then smooth out flow to achieve target cost. Shipping min cost Model 3 right away wd cause Tesla to lose money & die. Need 3 to 6 months after 5k/wk to ship $35k Tesla & live.
— Elon Musk (@elonmusk) May 21, 2018
Fast forward to the recent 2018 Tesla Annual Shareholder Meeting and Musk spoke to this once again. When asked about whether or not he could promise that the $35,000 Model 3 would, in fact, become a reality, Musk said it is definitely coming. He shared that Tesla should begin building the car in the first quarter of 2019. Musk’s words (via Teslarati):
Yes. We will definitely offer a $35,000 version of the Model 3. And probably at the end of this year is when we will be able to make a smaller version of the battery pack, and get into volume production of $35,000 version in Q1 next year. We would definitely honor that obligation, and we would do so right now if it were possible.
The base Model 3 will be single-motor, rear-wheel drive, and have a smaller battery pack. It was the first Model 3 that Tesla announced publicly, with at least 215 miles of range and a zero-to-60-mph-time under six seconds. Years before the Model 3 came to be, Musk already made indirect references to the $35,000 price tag. Bloomberg later confirmed the $35,000 price. Finally, when pricing was officially made public, again, $35,000 was the dollar amount.
Many people assumed that this version would be released initially, although Tesla never specified such. Additionally, many people figured that they would be able to partake in the full $7,500 U.S. federal EV tax credit, making the base Model 3 ring in at an incredible $27,500. A Tesla for this kind of money took the world by storm and is surely part of the reason the automaker was able to secure nearly a half-million paid reservations.
It wasn’t long before the realization came that the base Model 3 wasn’t coming for a very long time. In some people’s minds, it may never come. However, Musk has made it clear now on multiple occasions that Tesla will stand true to its word and bring the car to market. We have no idea how many copies the automaker plans to make, as much as we don’t know how many people actually want the base version.
There are many variables involved here. If Tesla is successful with the ramp up and begins making a notable profit – and there is high demand for the base Model 3 – one would assume the automaker will make a concerted effort to fill those orders.
However, if production and profits aren’t where they need to be and/or there’s not a lot of demand at that point in time, due to many already settling for another trim or a different car, Tesla won’t likely build a bunch of stripped-down models. The tax credit situation also adds a huge element of uncertainty to the equation.
Again, we’ll just have to wait and see how this all turns out.